Sorry for the long delay in posting anything. I have been busy living in denial since last November and have not felt inspired to write much.
Here is my latest Op-Ed from The Orlando Sentinel.
Should America aspire to become
Norway?
According to economists who now
study factors that determine human happiness, Norway is now the happiest place
in the world. The 2017 World Happiness
Report says so. It also says that
America has fallen to 14th place.
For the past several years,
economists have moved into a new realm of economic studies that focus on
factors beyond income, wealth, consumer spending and the gross domestic
product. Now, my discipline has
shifted to questions surrounding perceptions of mutual trust, shared purpose,
generosity and the degree to which nations have good governance.
Somewhere Bernie Sanders is
saying, “See, I told you so”.
But before we all start packing
our bags for this perceived Scandinavian utopia, it might be instructive to
look a little deeper at what is happening in Norway and whether we could pull
off the same model in the United States.
First, it is important for people
to also look at Norway’s overall level of economic freedom.
The Heritage Foundation annually
ranks countries, based on several criteria, to come up with a list of nations
that are free, mostly free, moderately free, mostly unfree and repressed.
For 2017 Norway ranks 25th
in the world. The United States sits at
17th – the lowest ranking in the history of this list.
However, when we look deeper at
Norway we find that in the area of protection of private property rights Norway
scores far higher than the United States.
Norway also outranks the U.S. in business freedom (the ease of starting
a business the amount of regulations faced), government integrity and trade
freedom.
It is somewhat paradoxical that
most American see Norway as a quasi-Socialistic state. Yet, citizens of Norway have more economic
freedom than Americans in many key areas that play into the happiness index as
well.
When it comes to tax burdens and
government spending the United States has more economic freedom than
Norway. The effective tax rate paid by
the average American is 26 percent. In
Norway it is 39.1 percent.
Moreover, government spending on
the social welfare network is much larger in Norway – and in other Scandinavian
nations – than in the United States.
Herein lies the question for
Americans:
If Norway is a relatively free
nation with few restrictions on trade, low levels of government corruption,
fewer eminent domain takings of property and greater business freedom, would it
make sense for America to follow Norway’s lead in those areas, while at the
same time, raise taxes on the wealthy and provide a larger social welfare
network? Wouldn’t we be happier then?
After all, as I tell my students
every semester, Norwegians voted for their tax rates and level of welfare. This system of high taxes and generous
benefits was not imposed on them and they can always leave for Hong Kong,
Australia or other freer nations if they feel they are being taxed too much.
Meanwhile, in America we have
witnessed more and more crony capitalism, skyrocketing levels of government
regulations, takings of property by corporations and sports team owners in
direct violation of the “public use” standard for eminent domain and choking
occupational licensing procedures that keep poor people from competing with
entrenched corporations.
Yet, there is one rarely
mentioned dilemma that we would face if we tried to imitate the Norwegian
model.
That is the fact that Norway is a
nation of 5 million relatively homogenous people. It is much easier to have a common view of
shared sacrifice, community spirit, mutual purpose and generosity when there is
so little cultural asymmetry.
Anthropologically speaking, it would be impossible to pull off what
Norway has achieved in a country as politically and culturally diverse as
America. We can barely get two people
to agree on a subset of shared values much less 320 million.
Finally, and no less
significantly, is the fact that America has a higher crime rate, greater
obesity levels and much lower educational achievement than Norway. Therefore, expanding the social welfare
network to model Norway would be far more expensive, and our tax rates much
higher.
So, while we have much to admire
about our friends across the Atlantic, it might be best to hope that America
returns to our higher levels of economic freedom than to ever expect to be as
friendly and socially responsible as they are.